📈  Chart of the Week 11/8/2026

By Michael Allison, CFA

Taking Stock of U.S. Household Wealth

In 1983, stocks were sitting near 8% of household net worth, and the family home was where American wealth really lived.

Fast forward to Q2 2026. Stocks and mutual funds now make up 35% of household net worth and real estate just 27%, per the Fed. That’s the widest gap in favor of stocks since the data begins in 1952.

The obvious story is the bull market in equities. Household stock holdings rose from about $51 trillion to $65 trillion in the year through June, while household real estate rose 2.5%. That accounts for the last 12 months. For the longer climb from 8% to 35%, we need to look at plumbing and demographics.

Start with the plumbing. In the 1950s and ‘60s, retirement assets sat mostly in corporate pensions, and the Fed doesn’t count pension assets as household wealth. IRAs arrived in 1974 and the 401(k) in 1978. The Fed counts stocks and funds held outright (IRAs included) and keeps 401(k)s in a separate bucket. So every retiree who rolls a 401(k) into an IRA moves money onto this chart.

Then there are the demographics. In 2011, San Francisco Fed economists Zheng Liu and Mark Spiegel projected that boomer retirements would drag the market P/E from about 15 to about 8.3 by 2025, as retirees sold stocks to live on. P/Es spent 2025 in the 20s instead.

Boomers kept their stocks, and for two good reasons.

Longevity is the first. A retirement that might run 30 years needs growth assets like equities, so the old “100 minus your age” equity allocation rule got quietly retired.

Taxes are the second. A long-held winning position gets a step-up in basis at death, which makes selling it in your 70s the expensive choice. The rational move is to sit tight.

The houses are locked up too. Median homeowner tenure nearly doubled from 6.5 years in 2005 to 11.9 years in 2023, according to Redfin, with boomers aging in place and low-rate mortgages keeping everyone else put. Homes barely trade, so they barely reprice. Stocks reprice every day.

And “household” is a generous word here. The top 1% own 50.9% of household stocks; the bottom half owns 0.6%. Real estate is spread far more evenly.

We also need to account for risk. The 2 earlier times stocks caught real estate on this chart, the late 1960s and 2021, were followed by the 1970s lost decade and the 2022 bear market. Jesse Livermore’s 2013 essay on the average investor’s equity allocation found that high allocations have historically preceded weak 10-year returns. Counting 401(k)s and other indirect holdings, households held a record 48.2% of financial assets in stocks at the end of June.

So the biggest pile of equity risk in the country belongs to the investors with the least time to recover from a drawdown and the strongest tax reasons not to trim.

If that’s you, the question worth asking is how to lower the risk without handing the IRS a check first. 🤷🏼‍♂️

Sources: Visual Capitalist, “Stocks Now Make Up More U.S. Household Wealth Than Homes”; Federal Reserve, Financial Accounts of the United States (Z.1), Q2 2026, Recent Developments (Sept. 11, 2026); FRED, Households; Corporate Equities and Mutual Fund Shares (BOGZ1LM193064005Q); NAHB Eye on Housing, “Value of Household Real Estate Assets Approaches $50 Trillion” (Sept. 2026); FRED, Share of Corporate Equities and Mutual Fund Shares Held by the Top 1% (WFRBST01122); FRED, Share Held by the Bottom 50% (WFRBSB50203); Liu and Spiegel, “Boomer Retirement: Headwinds for U.S. Equity Markets?” FRBSF Economic Letter 2011-26 (Aug. 22, 2011); ResiClub, Redfin analysis of median homeowner tenure (Feb. 21, 2024); Jesse Livermore, Philosophical Economics, “The Single Greatest Predictor of Future Stock Market Returns” (Dec. 2013); Opening Bell Daily, “US household stock allocation hits a record 48%” (Oct. 23, 2026).

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